Claims and Bad Faith Law Blog

AND A LITTLE MAGISTRATE FROM NEVADA SHALL LEAD THEM ....

In Kinney v. GEICO Cas. Co., No. 2:20-cv-02167-GMN-DJA, 2021 WL 4851089 (D. Nev. September 3, 2021) (Albregts, USMJ), an insurance case, a U.S. Magistrate Judge refused to enter a Stipulated Protective Order written by the parties, not without modifications commanded by the law, in the eyes of the Magistrate.

          The Court added provisions required by the law throughout Federal Courts and particularly in the Ninth Circuit where this case is pending.  Some of the more significant additions demanded by the law are:

1. The Court's execution of the proposed order is not a ruling that any specific document or testimony is confidential and so a secret.
2. The "compelling reasons" burden of proof remains on the party seeking to seal. The Court explicitly set out the "compelling reasons" standard, so if any party or its lawyers did not know what that was, they do now.
3. The "good cause" exception is a narrow one, and the Court explained how this exception operates to the required default showing of compelling reasons to seal testimony or a document in the Court file.
4. Last but not least, the Court made clear that the Rules abide and trump the parties' Stipulated Protective Order wherever they may be in conflict.

The Court made all these things clear by adding the following provisions to the proposed order written by the parties, and all before the Court signed the proposed order:

• The Court has approved the instant protective order to facilitate discovery exchanges, but there has been no showing, and the Court has not found, that any specific documents are secret or confidential. The parties have not provided specific facts supported by declarations or concrete examples to establish that a protective order is required to protect any specific trade secret or other confidential information pursuant to Rule 26(c) or that disclosure would cause an identifiable and significant harm.

* * *

• Specifically, a party seeking to seal judicial records bears the burden of meeting the “compelling reasons” standard, as previously articulated in 447 F.3d 1172.  Under the compelling reasons standard, “a court may seal records only when it finds ‘a compelling reason and articulate[s] the factual basis for its ruling, without relying on hypothesis or conjecture.” Ctr. for Auto Safety, 809 F. 3d at 1097. (quoting Kamakana, 447 F.3d at 1179). “The court must then ‘conscientiously balance[ ] the competing interests of the public and the party who seeks to keep certain judicial records secret.”  Ctr. for Auto Safety, 809 F.3d at 1097.
• There is an exception to the compelling reasons standard where a party may satisfy the less exacting “good cause” standard for sealed materials attached to a discovery motion unrelated to the merits of the case. “The good cause language comes from Rule 26(c)(1), which governs the issuance of protective orders in the discovery process: ‘The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.’ ” Id. (citing Fed.R.Civ.P. 26(c)). “For good cause to exist, the party seeking protection bears the burden of showing specific prejudice or harm will result if no protective order is granted.”  Phillips v. General Motors, 307 F.3d 1206, 1210-11 (9th Cir. 2002).  

* * *

• To the extent any aspect of the stipulated protective order may conflict with this order or Local Rule IA 10-5, that aspect of the stipulated protective order is hereby superseded with this order.

Kinney v. GEICO Casualty Co., 2021 WL 4851089, at *1-*2 (emphasis by the Court).

          This precise and scholarly ruling begs the question of why GEICO and the other parties need a stipulated protective order in an insurance case.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

BOTH THE SUBSTANCE AND THE PROCEDURE OF THE THING.

In Obertman v. Electrolux Home Care Prod's, Inc., No. 2:19-cv-02487-KJM-AC, 2021 WL 2823072 (E.D. Cal. July 7, 2021), the Court outlined both the substance and the procedure of sealing court records from public view.

            The Court concisely summarized the current law undergirding the strong, constitutional presumption of public access to court records at the beginning of its opinion.  First, the Court repeated the basic point that only judges, and not the parties or their lawyers, decide what the public can and cannot see in the records of courts.  Obertman, 2021 WL 2823072, at *1.

            Then the Court listed the substantive reasons that are currently recognized as justification for denying the public access to court records despite the default presumption that access is ordinarily required:

• Protect against promoting either private spite or public scandal;
• Protect courts from being repositories of libel; and
• Protect “'sources of business information that might harm a litigant’s competitive standing.'”

Obertman, 2021 WL 2823072, at *1.

            After repeating the substance of the presumption of public access and outlining the exceptions to that default presumption, the Court addressed the procedures widely employed for parties and their lawyers to request an exception and deny public access to court records.

            In this case, the Court summarized the procedures extant in the Ninth Circuit in which this Court sits:

• First, the judge must put the underlying motion or other document or record, into a frame whereby the judge determines whether or not the record is “'more than tangentially related to the merits of a case.'”
• If for example a motion is involved, and if the underlying motion is not tangential, then the inquiry stops because the presumption does not apply. The judge's analysis continues, however, if she finds that the underlying motion is "more than tangentially related to the merits of the case[.]"   When that determination is made, i.e., when the judge decides that the underlying motion is more than tangentially related to the merits of the case, then the party requesting to keep the record secret must provide evidence of "compelling reasons" for the secrecy.
• "Applying this standard, 'a court may seal records only when it finds 'a compelling reason and articulate[s] the factual basis for its ruling, without relying on hypothesis or conjecture,' and finds this reason outweighs the public’s interest and the presumption of public access."
• The requirement of a "compelling reasons" showing is not satisfied simply by citing to an earlier stipulated protective order, or by citing to any other previously entered "generalized protective order, including a discovery phase protective order." The requirement is satisfied instead by a showing related to the specific document or other court records as to which the party seeks to have the judge order the secrecy.

Obertman, 2021 WL 2823072, at *1.

            In the Obertman case, the request to seal judicial records concerned the plaintiff's motion to certify a class.  This motion was obviously more than tangentially related to the substance of the claim and so the "compelling reasons" requirement applied.

            The party requesting secrecy showed only that the parties in the case had all previously stipulated to a protective order.  This was hardly enough to overcome the presumption of public access to particular court records in that case.

            Among other things, the lawyers do not control the outcome of the secrecy question, the court controls that outcome.  Further, a mere stipulated protective order does not satisfy the required showing of compelling reasons to deny the public access to a specific court record.  Obertman, 2021 WL 2823072, at *2.

            Substance and procedure stated, and applied.  The Obertman decision does all of that in denying a request to bar public access to specific court records.  The presumption of public access to court records prevailed on this record.  The party seeking secrecy did not satisfy the prevailing requirement at this time, but it could try again.  "Accordingly, the request is denied, but with the possibility of renewal."  Obertman, 2021 WL 2823072, at *2 (emphasis by the Court).

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.